Darden Restaurants will pay a total of $715 million to acquire Ruth’s Hospitality Group. The company will use cash for this acquisition, which values RUTH stock at $21.50 per share. That’s a 34% premium to the stock’s prior closing price.
Darden is expecting pre-tax synergies from the deal to range between $5 million and $10 million in the first year. That will then jump to between $15 million and $20 million in the second year. Darden also expects the deal to be about 10 cents to 12 cents accretive to its fiscal 2024 earnings.
The Boards of Directors at Ruth’s Hospitality Group and Darden Restaurants have given their unanimous support to the deal. If the customary closing conditions are met when expected, the deal should close in June.
Cheryl Henry, President, CEO and Chairperson of Ruth’s, said the following about the deal:
“We are excited about the opportunity to join the Darden family. Our strategy and operating philosophy aligns well with Darden, and we have a strong cultural fit that should ensure a smooth transition.”
RUTH Stock Movement Today
The acquisition news has RUTH stock seeing heavy trading today as investors buy shares. As a result, some 10 million units are on the move as of this writing. For the record, the company’s daily average trading volume is closer to 407,000 shares.
Today’s news and heavy trading have RUTH stock up 33.5% as of Wednesday morning.
Investors looking for more of the most recent stock market news will want to stick around!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.